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Energy Efficiency, Renewables, Climate Change Top Senate Energy Agenda

Energy efficiency, renewables and climate change will take center stage at the Senate Energy and Natural Resources Committee in this Congress. Also on the ticket will be energy research and development (R&D) funding and what to do about the oil and gas royalty losses that resulted from missing price caps in contracts with the Interior Department, said Bob Simon, staff director of the committee. Opening up more of the Outer Continental Shelf (OCS) to oil and gas drilling will be absent, he said.

"You won't see a big 5,000-page energy message coming out of this Congress, and we have a reason for that," Simon said at the Natural Gas Roundtable in Washington, DC, on Thursday. "We recognize that the way to make progress on this is to work from the ground floor on a bipartisan basis, and that is Chairman [Jeff] Bingaman's (D-NM) vision for the committee and Congress."

Simon noted that the committee already has been very active this year with 8-10 hearings, a full-day committee workshop on biofuels and the mark-up of about 22 bills that were reported to the Senate. "We are up to a very fast start and we have a tremendous agenda before us," he said.

Senator Bingaman's energy policy is pretty well known at this point. Simon said it has five key elements: ensuring reliable energy supply; promoting energy efficiency; ensuring robust and transparent markets; balancing energy and environmental concerns; and strong support for R&D as a way to solve longstanding energy problems.

"If you are going to do something about global warming you need to step back and realize that 95% of carbon dioxide in the United States comes from energy production, distribution or end use," he said. "If you look at all greenhouse gas precursors..., the energy system in the United States is implicated in six out of seven tons of greenhouse gases from all sources." As a result, any environmental policy also must be an energy policy, and vice versa.

Simon noted that the Congress must be very careful in crafting new energy and environmental policies because of the potential impact on natural gas. Stricter environmental controls or other measures could have the indirect result of boosting gas demand when there may not be enough available supply. "That would be great if we had an abundant supply of natural gas in this country, but as people are more and more aware, our cushion of natural gas that we had in the 1990s isn't there today." Both small and large consumers are keenly aware of this and what impact it can have on a healthy commercial sector and the economy in general, he said.

This Congress must promote the development of all sources of energy supply, including new ones, said Simon. It also must do more to promote energy efficiency. He noted that the Bush administration's current budget request has cut funding for energy efficiency programs at the Department of Energy "which is totally backward to the challenge before us and...totally contrary to the direction of the Energy Policy Act of 2005 (EPAct).

"If you want to see a reduction in natural gas demand from power generation you should promote more renewable energy," said Simon. He said Bingaman has long supported implementation of a national renewable portfolio standard (RPS) and multiple reports from the Energy Information Administration have concluded that an RPS would reduce gas demand. "That certainly is one area that we should be looking at in terms of the overall approach of this Congress."

He also said Congress should do more to boost R&D on geothermal energy, which has the capability of providing up to 100,000 MW of power to the country. "Sadly, our present Department of Energy (DOE) and the administration have zeroed out the geothermal program at the [DOE] and that probably deserves another look in light of the latest science and technology that's available."

Another area that is sorely in need of greater investment and action, but one that is being neglected by the current administration, is clean coal, said Simon. Although EPAct addressed clean coal and other clean energy initiatives, such as a loan guarantee program for clean energy technology development, funding and implementation by the administration have been lagging, he said.

One thing the Senate panel is unlikely to tackle because of its "political complexity" is opening more of the OCS to drilling. Simon said the Lease Sale 181 bill, which opened up a small area in the eastern Gulf of Mexico to drilling, passed last year over significant opposition despite targeting an area that was not under Congressional moratorium. It also was supported by all of the adjacent coastal states nearby except one. The same will not be true of any other OCS area that currently is off limits, he said.

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